Haldia Petrochemicals plans temporary shutdown due to severe working capital crisis

MOSCOW (MRC) -- Haldia Petrochemicals is likely to opt for a temporary shutdown from the fourth week of this month following severe working capital crisis that is resulting in a shortage of naphtha and low plant load for the last few months, as per Plastemart.

It has been learnt that most of the technical officers of HPL, as well as shortlisted bidder Indian Oil, are not averse to the idea of a shutdown for a few weeks to cut down continuous losses and maintenance of the plant. The capacity of the plant is 260 tonnes per hour, but it is operating at 110-120 tonnes on average.

The firm had an accumulated loss of Rs 2,500 crore till March 2013. From April to October, 2013, HPL has posted a loss of Rs 521 crore taking the accumulated losses to over Rs 3,000 crore. The net worth of HPL has already eroded by Rs 50 crore. If the losses continue, then the company will have to go to BIFR.

As MRC wrote previously, a division bench of the Calcutta High Court dismissed all appeals of the West Bengal government, WBIDC and Haldia Petrochemicals Ltd over a dispute between them and The Chatterjee Group regarding 155 mln shares of the ailing petrochemical company and allowed the Chatterjee Group to move to International Court in Paris for arbitration regarding the disputed 15.5 crore shares. This block constitutes 9.22% equity stake of the company and holds the key for management control.

Haldia Petrochemicals Ltd is a modern naphtha based petrochemical complex at Haldia, West Bengal, India. Haldia has played the role of a catalyst in emergence of more than 500 downstream processing industries in West Bengal with a capacity to process more than 3,50,000 TPA of polymers, among which are polyethylene (PE) and polypropylene (PP).
MRC

MOSCOW (MRC) -- The Korea Trade Commission has decided to launch an investigation into alleged dumping of polyethylene terephthalate (PET) film imported from Japan, reported Apic-online with reference to Yonhap News Agency.

The investigation is the result of a formal complaint filed by three Korean producers of PET film. The commission said it decided to launch the investigation "after a review of materials submitted by the petitioners yielded a conclusion that their complaint was reasonable."

The commission expects to finish its investigation by February, at which time it will make a preliminary determination on possible anti-dumping measures, with a final decision in May.

As MRC wrote earlier, in October 2013, Malaysia imposed anti-dumping duties on PET imported from Thailand and biaxially-oriented polypropylene (BOPP) from China, Indonesia, Taiwan, Thailand and Vietnam. The duty on PET from Thailand will increase to 49.25% from zero for the period from 21 April 2011 through 20 April 2016. For BOPP imported from China, Taiwan, Thailand and Vietnam, a permanent anti-dumping duty of up to 12.37% will apply from 24 April 2013 to 22 April 2018.
MRC

MOSCOW (MRC) -- Arkema, a France-based chemical manufacturer, is announcing a price increase on its Luperox, Vulcup and Dicup organic peroxide ranges commercialized in Europe, Middle-East and Africa within the crosslinking segment, from 5 to 8% depending the grade, according to the company's statement.

Arkema is also announcing a price increase of EUR150/tonne on its Luperox organic peroxide within the composite segment.

These increases will be effective by January 1st, 2014 or as contracts allow. These adjustments have become necessary to offset further rises in raw materials, energy and transportation costs, and to sustain investments to cope with Health, Environment and Safety regulations.

As MRC reported earlier, following a EUR50/tonne price increase on August 1st 2013, Arkema announced a further EUR50/tonne price increase effective early September for its entire Evatane range - high content ethylene vinyl acetate (EVA) copolymers. Both price increases, amounting to EUR100/tonne over the August and September period, have become necessary following two consecutive months of raw material cost increases, while EVA market prices have significantly eroded since the beginning of 2013.

Arkema with annual revenue of EUR6.4 billion is a leading European supplier of chlorochemicals and PVC. Kynar and Kynar Flex are registered trademarks of Arkema Inc
MRC

MOSCOW (MRC) -- LG Chem is likely to start up a new acrylonitrile butadiene styrene (ABS) plant in China, according to Apic-online.

A Polymerupdate source in South Korea informed that the plant is likely to be brought onstream in Q1, 2014.

To be located in Huizhou, Guangdong province, the plant has a production capacity of 150,000 mt/year.

As MRC informed earlier, South Korean petrochemical conglomerate LG Group will invest W3500 billion (USD3.3 billion) in its petrochemical business in the current year. The part of the allocated funds will be invested into expansion of ethylene vinyl acetate (EVA) and styrene-butadiene rubber production capacities of LG Chem's affiliate.

LG Chem Ltd., often referred to as LG Chemical, is the largest Korean chemical company and is headquartered in Seoul, South Korea. According to ICIS report, it is 15th biggest chemical company in the world in 2011. It has eight domestic factories and global network of 29 business locations in 15 countries. LG Chem is a manufacturer, supplier, and exporter of petrochemical goods, IT&E Materials and Energy Solutions.
MRC

MOSCOW (MRC) -- French refinery losses may reach 500 million euros (USD689 million) this year as demand falls and profit margins are eroded by US imports, according to the country oil lobby, sid Hydrocarbonprocessing.

"The situation is very difficult," said Jean-Louis Schilansky, head of the Paris-based Union Francaise des Industries Petrolieres, which represents companies including ExxonMobil and Total, the country’s biggest refiner.

Workers at all five of Total’s French refineries have participated in a strike in recent days, demanding the explorer use profit from other parts of the business to pay bigger salary increases. The company has shut plants and plans further reductions in its European refining operations.

Refiners are mothballing plants across Europe where overcapacity remains as high as 10%, according to UFIP. Over the past four years LyondellBasell, Petroplus and Total have stopped refining at their plants at Berre, Petit-Couronne, Reichstett and Dunkirk.

France now has eight working plants compared with 24 in 1977, with Exxon operating two, Ineos Group one and Total the rest.

European margins dipped to 13 euros a metric ton this month after rising as high as 32 euros a ton in February to give an average of 18 euros a ton for the year, according to data on UFIP’s website. This compares with averages of 34 euros a ton last year and 14 in 2011.

French refiners lost about 1 billion euros a year in the three years between 2009 and 2011 amid an economic slump, UFIP reported. They broke even last year when margins were above the 30 euros-a-ton level the organization considers is needed by refiners to break even.

The region’s refiners are struggling to compete with plants in the US, run using relatively cheap natural gas, Schilansky said. A shale gas boom in the US has pushed gas prices lower.

Total has set a target to reduce its European refining and petrochemicals business by 20% from last year to 2017. As the biggest refiner in western Europe, where it operates eight plants, the company has borne the brunt of lower margins and a drop in the consumption of fuel products.

Total reported third-quarter profit, excluding changes in inventories, fell to 2.72 billion euros from 3.36 billion euros a year earlier, the Courbevoie, France-based company said in October.
MRC